Income Sources, Intra-Household Allocation And Individual Poverty

Policies aimed at redistributing to the most vulnerable individuals must consider inequality within households as much as between households. In that spirit, many cash transfers in low and middle income countries are targeted at women rather than men. Tax legislations also contain specific gender provisions that treat men and women differently. Whether these policies operate intrahousehold redistribution, or are defeated by the household agency problem, is an open question. This paper provides new insights by adapting models of intra-household allocation to account for women’s and men’s net-of-tax earnings and targeted beneffits as determinants of the allocation function. We suggest applications using household expenditure data for Argentina and South Africa. The net earnings and benefits commanded by the wife are often positively related to her and her children’s resources. We provide counterfactual simulations to illustrate how the wife’s financial power -and its sources- may modify her consumption share and thus her individual poverty status.